20 | Sunday Review ‘Digital’ miscalculation: Jubilee’s policy blunders In less than a year in office, the UhuRuto government has made several decisions that have left many questions begging for answers BY KENFREY KIBERENGE @KenKiberenge kkiberenge@ke.nationmedia.com K enyans in recent weeks have been stunned by a series of decisions made by the Jubilee Government, some of which are considered in some quarters to be unnecessarily controversial and others embarrassing to officialdom. Top on the list is the ban on night travel of public service vehicles which has frustrated operators and commuters alike since last month. Initially, the Transport Ministry said all PSVs could not operate beyond 6 pm, but this was later revised to 10 pm. Transport Cabinet Secretary Michael Kamau said this was the original deadline. Justifying the ban, the minister said many lives have been lost because responders are unable to reach the victims in time at night due to darkness. But he said that it is not a ban per se since PSVs can operate beyond 10 pm if they meet certain requirements. Long-distance buses that wish to operate beyond the set time have to be fitted with digital speed governors that are centrally monitored from the head office. “You can monitor the speed at which they are moving, and you can tell where they stopped and for how long,” he said. The digital speed governors cost an aver- age of Sh20,000, and the minister argues that PSV owners can afford them going by the fancy add-ons like wheel rims and video projection in their vehicles. The buses must also have two drivers and make a 30-minute stop every four hours to avoid fatigue. The National Transport and Safety Au- thority (NTSA) chairman Lee Kinyanjui says no bus company has met the conditions to be licensed. Mr Nikhil Hira, a tax partner at Deloitte Kenya, says the ban has had a negative effect. “Accidents now happen in day time as drivers try to beat the deadline,” he says. But Mr Kinyanjui says there has been no accident since the ban was imposed. “December and January are traditionally the worst months in terms of accidents, but the results now are encouraging,” he said. The impact of the ban is being felt this month with companies laying off staff who worked during the night shift. Mr Felix Kwajumbe, a supervisor at a Spanish bus company that plies the Mombasa-Nairobi route, said they will cut their workforce by half at the end of January, having reduced the number of daily trips from 12 to six. “We have given letters of dismissal to 17 workers out of 40,” he said. “We don’t know where they will go, but at the end of January, we will give them their dues.” Mr Kwajumbe said they have also been forced to renegotiate loan repayments with financiers and a planned April expansion to cover the Kisumu route has been put off. Restaurants at the Mtito Andei stop-over have also laid off night shift workers. Suppliers to bus companies have also been hit. But Mr Kinyanjui maintains that the gov- ernment will not back track, arguing that an equal number of jobs is being created when commuters spend an extra night in hotels waiting for morning buses. In addition to the ban, the government — in a bid to stem public expenditure — has barred civil servants from holding seminars at private hotels. According to Mr Hira, that will adversely affect hotels, particularly during the off-peak season. He warns that when governments stop spending, there is a decrease in consumer confidence which stagnates the economy. On its knees Kenya Association of Hotelkeepers and Caterers Coast branch executive officer Sam Ikwaye warns that many workers will be laid off for lack of business. Mr Ikwaye said most hotels survive on conferences, seminars and workshops outside the busy festive season and mid-year when the high tourist season kicks in. “The tourism sector is almost on its knees.” The government also froze new public recruitment last November to address a surging wage bill. The idea of retrenching some workers has been floated, although experts say it would worsen the already high unemployment rate. On State jobs, President Uhuru Kenyatta was forced to rescind two appointments that contravened the law. First was the direct appointment of Mr John Mututho as chairman of the National Authority for the Control of Alcohol and Drug Abuse (Nacada), which he had to cancel to allow MPs to vet him. The appointment of former presidential candidate Mohammed Abduba Dida as chairman of the Constituency Development Fund was also revoked after it emerged that the chairperson must be appointed from one of the board members and be vetted by parliamentarians. The decisions appeared FILE| NATION Mr Mohammed Abduba Dida, a presidential candidate in the last General Election, had his appointment by President Kenyatta to chair the CDF board revoked since it was irregular. rushed and not well thought-out as was that of the appointment of a tribunal headed by former judge Aaron Ringera to investigate six members of the Judicial Service Commission. The appointment was frozen by the courts and the situation remains in limbo. On another front, ICT Secretary Fred Matiang’i announced late last year that the government would slash its spending on print advertising by 50 per cent and instead advertise online. “We will, with immediate effect, embark on spending more on digital advertising to reduce costs.” The decision comes at a time when the Ju- bilee administration is locked in battles with the media over two stringent media laws as well as the issue of digital migration. Experts say that governments spend to stimulate economies as well as a reciprocal gesture to tax-paying entities. Last year, the government was criticised for the implementation of the VAT Act 2013 ‘‘ that increased the price of basic commodities like maize flour, milk among others. Mr Hira says the impact of the VAT Act was already being felt, and has been worsened by low government expenditure. “My big concern is that with so much basic foodstuff becoming taxable, it has had an effect on disposable income and on spending as well,” he says. Financial expert Steve Biko says there is no silver lining in the VAT Act. “In as much as it streamlines management of key issues compared to the old one, its implementation and total disregard of the economic disruption it is causing negates any positive aspect it might have,” he says. The government has also been on the back My big concern is that with so much basic foodstuff being taxed, it has had an effect on disposable income and on spending as well” Nikhil Hira, tax partner at Deloitte foot as it seeks to rationalise a contentious decision to have Kenya Ports Authority (KPA) guarantee that 35 per cent of cargo will be moved via the proposal new standard gauge railway. An agreement signed between KPA, the Kenya Railways Corporation (KRC) and the project financiers – Export Import Bank of China – effectively hands control of the port business to the financier in what is referred to as Take/Pay agreement. KPA is compelled to provide 35 per cent cargo to be transported on the new railway as part of an undertaking that the government gave the bank, which is funding the Sh327 billion ($4 billion) project to the tune of Sh278 billion. Money raised under the agreement will help in servicing the huge loan from China, which is currently a subject of investigation by two parliamentary committees. SUNDAY NATION January 26, 2014 LOOKING BACK | From ban on night travel to irregular appointments, government decision-making in the spotlight